This proposal builds on our current research efforts to understand the role of glucocorticoids in bone development and remodeling using novel genetic strategies. A long-standing paradox in bone biology has been the seemingly disparate effects of glucocorticoids on osteogenesis in vivo and in vitro. Published literature shows that glucocorticoids can promote osteoblast differentiation and bone formation in a variety of in vitro models, even though high levels of glucocorticoids typically decrease bone mass and inhibit markers of bone formation in humans and mice. The significance of the osteogenic effect of glucocorticoids seen in vitro remains unclear, although this may reflect a permissive role in the maintenance of the osteoblast phenotype. We have recently generated transgenic mice with osteoblast-targeted expression of 11beta-hydroxysteroid dehydrogenase-2 (11beta-HSD2), a metabolic enzyme that disrupts glucocorticoid signaling by converting bioactive glucocorticoids to their inactive 11-keto-metabolites. This approach will allow us to block all known glucocorticoid signaling pathways in bone and assess the physiological role of glucocorticoids on bone development and remodeling in vivo. Thus far, transgenic expression of 11beta-HSD2 in mature osteoblasts results in a fascinating sex- and skeletal-site dependent bone phenotype in which there is reduction of bone volume in vertebrae of female mice. The experiments in this proposal are designed extend our preliminary studies and test the hypothesis that endogenous glucocorticoids are key regulators of osteoblast differentiation, osteoblast function and bone remodeling in vivo. To this end, the specific aims are: 1) To determine the cellular and molecular mechanisms by which endogenous glucocorticoids affect osteoblast function and bone remodeling using the Col2.3-HSD2 transgenic mouse model in which 11beta-HSD2 is expressed in mature osteoblasts; and 2) To determine the role of endogenous glucocorticoids in osteoblast differentiation and function using a constitutively active and temporally inducible Col3.6-HSD2 transgenic models in which 11beta-HSD2 is targeted more broadly to mature osteoblasts and their progenitors.